What is amortization?
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Answer Posted / n.r.jothi narayanan
Technically speaking Amortization refers to INTANGIBLE
ASSET and Depreciation refers to TANGIBLE asset.
For example a British company invented a washing machine
with a technology of washing clothes without water.
The fall in value of this new tech. washing machine over the
years is a Depreciation.(washing machine:a tangible asset.)
The fall in value of the patent of the new technology over
the years is a process of Amortization.(patent of new techno
-logy for waterless - washing machine: an intangible asset).
N.R.JOTHI NARAYANAN,
PALAKKAD-678001
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